The rights and obligations of the Board of Directors according to the law

1. What is the Board of Directors?

According to Clause 1, Article 153 of the Law on Enterprises 2020, the Board of Directors 2020 regulates the Board of Directors as follows:

“Article 153. Board of Directors

1. The Board of Directors is the company’s management agency, with full authority on behalf of the company to decide and exercise the rights and obligations of the Board of Directors. company, except for the rights and obligations under the authority of the General Meeting of Shareholders.

[…]”

Accordingly, the Board of Directors is the company’s management agency, with full authority on behalf of the company to decide and exercise the rights and obligations of the company, except for the rights and obligations under the authority of the General Meeting of Shareholders.

2. What rights and obligations does the Board of Directors have?

According to Clause 2, Article 153 of the Law on Enterprises 2020, the Board of Directors 2020 regulates the Board of Directors as follows:

The Board of Directors has the following rights and obligations:

– Decide on the company’s strategy, medium-term development plan and annual business plan company;

– Propose the types of shares and the total number of shares authorized to be offered for each type;

– Decide to sell unsold shares within the scope of the number of shares authorized to be offered for each type; decide to mobilize additional capital in other forms;

– Decide on the selling price of the company’s shares and bonds;

– Decide to repurchase shares according to the provisions of Clauses 1 and 2, Article 133 of this Law;

– Decide on investment plans and investment projects within the authority and limits prescribed by law law;

– Decide on solutions for market development, marketing and technology;

– Approve contracts to buy, sell, borrow, lend and other contracts and transactions with a value of 35% or more of the total asset value recorded in the company’s most recent financial report, unless the company’s charter stipulates a different ratio or value and the contract and transaction are under the decision-making authority of the company. The General Meeting of Shareholders according to the provisions of Point d, Clause 2, Article 138, Clauses 1 and Clause 3, Article 167 of this Law;

– Election, dismissal, dismissal of the Chairman of the Board of Directors; appoint, dismiss, sign contracts, terminate contracts with the Director or General Director and other important managers as prescribed by the company’s Charter; decide on salaries, remunerations, bonuses and other benefits of those managers; appoint authorized representatives to participate in the Board of Members or General Meeting of Shareholders in other companies, and decide on the remuneration and other benefits of those persons;

– Supervise and direct the Director or General Director and other managers in running the company’s daily business operations;

– Decide on the company’s organizational structure, internal management regulations, decide on the establishment of subsidiaries, branches, representative offices and capital contributions and share purchases of other enterprises;

– Approve the agenda and content of documents for the General Meeting of Shareholders, convene a General Meeting of Shareholders or collect opinions for the General Meeting of Shareholders to pass a resolution;

– Submit annual financial reports to the General Meeting of Shareholders;

– Propose the amount of dividends to be paid; decide on the time limit and procedures for paying dividends or handling losses arising during the business process;

– Proposing the reorganization and dissolution of the company; request company bankruptcy;

– Other rights and obligations according to the provisions of this Law and the company’s Charter.

3. Does a company representative who signs a transaction contract worth less than 35% of the total value of corporate assets need to be approved by the Board of Directors?

According to Clause 2, Article 153 of the Law on Enterprises 2020, it is stipulated as follows:

“Article 153. Board of Directors

[…]

2. The Board of Directors has the following rights and obligations:

[…]

h) Approve contracts to buy, sell, borrow, lend and other contracts and transactions with a value of 35% or more of the total asset value recorded in the company’s most recent financial report, except in cases where the Company’s Charter stipulates a different ratio or value and the contract or transaction falls under the decision-making authority of the General Meeting of Shareholders as prescribed in Point d, Clause 2, Article 138, Clauses 1 and 3, Article 167 of this Law;

[…]”

At the same time, Article 167 of the Law on Enterprises 2020 states as follows:

“Article 167. Approval of contracts and transactions between the company and related persons

1. The General Meeting of Shareholders or the Board of Directors approves contracts and transactions between the company and the following related persons:

a) Shareholders, authorized representatives of shareholders who are organizations owning more than 10% of the total common shares of the company and their related persons;

b) Members of the Board of Directors, Directors or General Directors and related persons of surname;

c) Enterprises where members of the Board of Directors, Controllers, Director or General Director and other managers of the company must declare according to the provisions of Clause 2, Article 164 of this Law.

2. The Board of Directors approves contracts and transactions according to the provisions of Clause 1 of this Article and have a value of less than 35% of the total value of the enterprise’s assets recorded in the most recent financial report or another smaller ratio or value as prescribed in the company’s Charter. In this case, the company representative signing the contract or transaction must notify the members of the Board of Directors and Controllers about the subjects related to that contract or transaction and enclose the draft contract or main content of the transaction. The Board of Directors decides to approve contracts and transactions within 15 days from the date of receipt of the notice, unless the company charter stipulates a different period; Members of the Board of Directors with interests related to the parties in the contract and transaction do not have voting rights.

[…]”

From the above regulations, the Board of Directors approves contracts and transactions according to the provisions of Clause 1 of this Article and have a value of less than 35% of the total value of the enterprise’s assets recorded in the most recent financial report or a small percentage or other value. more than prescribed in the company’s Charter. And Approve contracts to buy, sell, borrow, lend and other contracts and transactions with a value of 35% or more of the total asset value recorded in the company’s most recent financial report.